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4 moves to tackle financial transitions in the new year

If you’re like many Americans, chances are you have some set goals that you’d like to accomplish in the New Year. On any given day, those aged 20-something to 40-something are changing jobs, buying houses or cars, having children, moving, incurring more debt, paying down existing debt and more. That’s a lot of change! And it typically happens in bulk. So how do you maintain financial clarity and organization when your life is facing so much transition? Follow these four steps:

1. Practice continuous communication

Whether you’re paired off or flying solo, it’s important to set monthly money dates with yourself or your partner to review financial progress and goals. You need to be in sync with what you’re spending, saving and what changes need to be made so your finances are able to be easily adjusted when and if needed.

2. Prioritize

You can do it all. You just can’t do it all at once. With the changes that lie ahead, it’s important to target which goals take priority and which expenses take precedence. Ask yourself:

  • What are the two or three items of most importance to me?
  • Why am I selecting these items above the others?
  • Financially, what makes the most sense to focus on?

You may find that paying off debt and working to build your emergency fund take priority over saving for travel. Or that contributing enough to your retirement to get your employer match and then moving any surplus savings to your home down payment fund is the best route.

3. Get an early start

Having a plan in place will allow you to make educated and informed decisions when it comes to your money. Are you moving to a new city? Begin researching job opportunities and connecting with potential employers before you relocate. Having a baby? Ensure that you update your spending plan way before baby is here. Factor in diapers, increased health insurance, daycare, new baby gear and see if you can maintain your current savings and spending level or if you need to cut back. Changing jobs? While it may seem like a good offer, review your potential employer’s benefits before saying “yes” to understand increased insurance costs, group disability or life insurance benefits, 401(k) or retirement plan matches and any remote working or flextime benefits to ensure you’re really coming out ahead.

4. Make a plan

Plans might not always work out as we’d like, but having one in place will guide us to the decisions we need to make to get back on track. Get clear on income, account balances and expenses and then list out steps you need to take to prepare for the change ahead. Break these steps into monthly or weekly tasks. Keep a list on your phone or on your refrigerator and cross tasks off as you complete them. Adjust as needed (because plans do change).

Transition is an ongoing part of life. Things will always change, which means your financial situation will, too. If you keep track of priorities, stay in tune with your money, get a head start and have a plan in place to course-correct, your finances can stay aligned with your goals no matter what lies ahead.